US dollar tried to be stronger in a sales yesterday or on Monday. That was after the main currency was significantly weakening in the early week session. It was in certain levels before.
The index of dollar or DXY was around 92.19 which increased by 0.12 percent from the daily open price. The movement of that currency was quite flattening in some days lately in the market.
The cause is the US obligation yield result which decreased. The relationship between the American currency with the obligation market is becoming so strong. It was after the value increased.
That situation happened in several months lately. That is why; it is quite normal that the decline of US obligation yield result last week was straightly responded by the dollar weakening.
Powell is so Optimistic to The Recovery
In the latest statement made by Powell on Sunday, he stated the optimism due to the recent situational. Powell said clearly that the American economy is now in a reversing point and rebound can happen.
It is especially in several months ahead. However, he also warned that the hasty easing of lock down can create the new wave of COVID-19. The economy recovery may increase the obligation result significantly.
That is also able to support the dollar strengthening to it’s rivals. That is why; the next focus of investors is on the new us inflation data release in March. They are ready to get the first evidence of inflation.
In fact, the inflation jump has been anticipated by the market participants for the next few months. That is really possible to happen because the sharp decline caused by the pandemic effect.
The United States of America Consumers Inflation
Based on the data on March, the inflation of the USA consumers increased. That release reported by the USA employment Statistic Institution. It shows the increasing CPI or Consumer Price Index.
In a monthly base, it increased by 0.6 percent to the highest level since August 2012. That achievement was higher than before which was in 0.4% and the expectation of 0.5%. How about the core CPI?
It was not measuring the goods' prices, especially for the volatile ones. The examples are like the fuel and foods. The core CPI also increased by 0.3% from 0.1% in February. That number is higher than the expectation.
The expectation made was 0.2%. The cause of rising inflation this time is a very quick recovery of the American economy. That is supported by the massive fiscal stimulus. Further more, USA is almost able to handle the pandemic.
America Did a Great Job in Handling the Pandemic
The United States really did a great job to handle the coronavirus spread there. The curve is flattened and the vaccine implementation is wider. However, that doesn’t make the market is optimism.
It is because some the Fed’s delegates and economic experts has been saying a prediction that the inflation increase is temporary. That is why; the inflation data in the future still needs an attention.
They expect that the trend will moderately increase next year although it still needs any checking. According to an expert, the USA central bank delegate will still on their point of view about that temporary situation.
The Fed will not hawkish
The low expectation of the interest rate increase can make the USD weakened after the US inflation data was released. The index of the dollar declined by 0.19% to the level of 91.91. It stop the increase before.
The present dollar index is the lowest in three months. That data will not change the outlook of the Fed to still on the low interest rate. That decision will be applied for some times ahead.
